PUC Releases Management Efficiency Investigation Report for PECO Energy Co.

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HARRISBURG – The Pennsylvania Public Utility Commission (PUC) today released a Management Efficiency Investigation report for PECO Energy Co. evaluating the implementation of recommendations from a 2014 Focused Management and Operations Audit.

 The Commission voted 4-0 today to make the audit report and the PECO implementation plan public.  The report indicates that the company has effectively or substantially implemented 14 of the 23 prior recommendations and has taken some action on the remaining nine recommendations. In addition, the Commission’s Bureau of Audits has made 13 follow-up recommendations for improvement.

 Among the more notable improvements implemented by PECO include:

  • PECO routinely performs cost benefit analyses for contracted services to validate its business practices of using either in-house resources or contractors for targeted services which has resulted in realized one-time savings of approximately $1.4 million.

  • Automated the process of providing work packet and project information to conttractors.

  • Improved oversight of contractor performed work by dedicating additional resources to project oversight and implementing process improvements.

  • Accelerated its main replacement rates for both cast iron and bare steel mains.

  • Partnered with a vetted outside agency to conduct vulnerability assessments at selected facilities, resulting in the identification and correction of various, previously unidentified security issues.

  • Reduced its risk of loss from uncollectible accounts receivable by reducing long-term accounts receivable balances through increased oversight of high balance accounts, requiring down payments for most types of payment arrangements, and requiring deposits for delinquent accounts.

 The audit report also identified follow-up recommendations for additional improvements, including:

  • Improving its response times to priority one emergency calls and conduct common cause analysis to determine if changes could improve future response times.

  • Reduce the number of occurrences of customers experiencing 10 or more interruptions per year.

  • Implement plans, programs, and initiatives designed to reduce the number of gas line hits resulting from mapping inaccuracies.

  • Correct minor security deficiencies identified at several facilities.

  • Determine if any conditions of “combination of data” are present within its systems and revise data security policies to deploy appropriate safeguards.

  • Enhance the inventory review process; conducting reviews of inactive materials by Engineering with support from Supply and documenting the justification for retaining inactive inventory.

  • Investigate the cause and address data integrity issues in the fleet maintenance system.

PECO has accepted in full all of the follow-up recommendations. It has indicated it will implement the majority of the recommendations by Dec. 2018, some with ongoing implementation. 

PECO provides electric and gas service to 1.6 million and approximately 517,000 customers in Pennsylvania, respectively.

The Pennsylvania Public Utility Commission balances the needs of consumers and utilities; ensures safe and reliable utility service at reasonable rates; protects the public interest; educates consumers to make independent and informed utility choices; furthers economic development; and fosters new technologies and competitive markets in an environmentally sound manner.

For recent news releases and video of select Commission proceedings or more information about the PUC, visit our website at www.puc.pa.gov.  Follow the PUC on Twitter – @PA_PUC for all things utility.  “Like” Pennsylvania Public Utility Commission on Facebook for easy access to information on utility issues.

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